Europe, N America, China cut interest rates

The blog welcomes the co-ordinated action by central banks, including the US Federal Reserve, European Central Bank, and the Banks of England and China, in cutting interest rates. Anything that suggests policymakers are starting to get their act together is good news.
But as the blog has argued since February, cutting interest rates in today’s financial climate is like pushing on a string. Today’s cut similarly seems to be more gesture politics than a strategy to tackle the real causes of today’s problems – overleveraged banks, and collapsing housing markets.
Prospective lenders have clearly found current rates of interest unattractive, and so have exited the market. The blog therefore finds it hard to believe that cutting their potential reward will now encourage them to return